LawrenceG. McMillan

The broader stock market has pushed higher this week, feeding off the strong upside breakout of just over a week ago.

While there are some overbought conditions appearing, and there are certain negative seasonal factors, the S&P 500 Index (SPX) – as well as the Dow and NASDAQ Composite – has ignored them so far. There is strong support at 2480 on the SPX chart, which was the top of the previous trading range.

Our previous targets of 2540-2560 (via one method) and 2576 (via the Total put-call ratio buy signal) remain in effect. From the accompanying chart, you can see that the “modified Bollinger Bands” (mBB) have tightened about the 20-day moving average. That’s because realized volatility is declining again. SPX is approaching the upper, +4σ Band, which is at about 2510. It’s been hovering in this area for a couple of weeks now. If SPX were to close above that Band, a sell signal would set up.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.